Former Playboy Playmate Karen McDougal has been released from a contract restricting her from talking about an alleged extramarital affair with Donald Trump.

McDougal, 46, filed a lawsuit last month to be released from an agreement with American Media Inc. (AMI) that prevented her from speaking out against the US President, 71.

The New York Times reports the actress and model reached a settlement agreement with the publisher on Wednesday that allows her to discuss reports of the 'affair' publicly, and to keep the AU$192,000 she was paid in exchange for all rights to her story in 2016.

In turn, AMI - the parent company of The National Inquirer - retains rights to up to $AU96,000 of any future profits from McDougal's story, and to any photographs of her it already has.

Karen McDougal has given her first televised interview about her alleged affair with Trump. (CNN)

"[The deal] frees me from this contract that I was misled into signing nearly two years ago." the 1998 Playboy Playmate of the Year said, according to NBC.
"My goal from the beginning was to restore my rights and not to achieve any financial gain, and this settlement does exactly that."

In March, McDougal gave her first televised interview to CNN about the intimate encounters she claims she shared with Trump more than a decade ago, before the business mogul was elected into office.

The president denied the affair via a White House spokesperson.

McDougal’s story was not unlike that of adult film star Stormy Daniels, who offered to return ‘hush money’ paid to her by Trump’s lawyer so she can speak about their alleged 2006 tryst without fear of being sued.

Karen McDougal pictured in 2008 (left) and on the cover of Playboy in 1998 (Getty, Playboy)

What is Karen McDougal’s story?
In her CNN interview last month, McDougal alleged she and Trump had a 10-month romantic relationship in 2006 - the year after he married his current wife Melania.
She said she met with Trump “dozens of times”, and claimed he attempted to offer money after their first alleged sexual encounter, leaving her in tears.

“I actually didn’t know how to take that,” she recalled.

“I don't even know how to describe the look on my face. It must have been so sad."

According to McDougal, Trump told her he loved her “all the time”, and “never” mentioned Melania. He also rarely spoke of his son Barron, who was an infant at the time.

McDougal also claimed she spent a weekend with Trump at a golf tournament in Tahoe - the same event Stormy Daniels says was the site of her first meeting with the Apprentice star.
"My first thought was, 'How could she be with him when I was with him?'," McDougal said.
"I can't imagine when he found the time, except for maybe the day I left."What prompted her to take legal action?

Donald Trump denies having an affair with Karen McDougal. (Getty)
McDougal initially sold her story about the alleged Trump affair to The National Enquirer for AU$192,000 in August 2016.
However, the magazine never ran the interview.
According to The Wall Street Journal, the contract drawn up by American Media Inc. did not require the story to be published, and compelled McDougal to remain silent.

Journalist Ronan Farrow has described this tactic as a "catch and kill" contract, suggesting the story was "buried" as a favour to Trump.

McDougal launched a lawsuit against the company, seeking to have the exclusivity deal invalidated.
American Media Inc told CNN they had not “silenced” McDougal, adding that she had been “free to respond to press inquiries about her relationship with President Trump since 2016".How was her situation different to Stormy Daniels’?
As Think Progress explained, the contracts signed by the two women differed in a number of ways, with McDougal’s posing a greater threat to Trump and his associates.
For instance, Stormy Daniels' was a non-disclosure agreement which prevented her from talking about her relationship with Trump.

Stormy Daniels has recorded an interview about her alleged affair with Trump for 60 Minutes. (Getty)
McDougal’s contract, however, granted her the right to talk about affairs she’d had with married men to AMI and in magazine columns. An amendment was also made, allowing her to respond to press enquiries about her relationship with Trump.

This, according to Think Progress, made it less likely for a judge to determine that the agreement prevents her from speaking about her Trump encounter, where Daniels’ was less straightforward.
The payment of the two contracts also differed. In the US, direct corporate donations to political election campaigns are illegal, regardless of whether they are reported or not.
McDougal argued that AMI’s contract represented a donation from the company to benefit Trump’s presidential campaign by restricting her from discussing the alleged affair.